tv The Daily Show With Jon Stewart Comedy Central February 1, 2012 6:00pm-6:30pm PST
central's world news headquarters in new york, this is is "the daily show" with jon stewart. ( cheers and applause ). captioning sponsored by comedy central >> jon: welcome to the ""daily show"." my name is jon stewart. oh, what a show tonight. my guest-- it's going to be a good one-- my guest, jonathan macey, a professor at yale law school, yale business school, and yale's preschool. very busy. law ( laughter ) first i want to take a moment to talk to you about pandering. i mean, sure, it may look easy, as easy as the giants winning the super bowl this sunday. ( cheers and applause ). pander, and that didn't work.
i got booed in my own studio. it can be surprisingly tricky. for instance, right now, newt gingrich in florida is trying to win over hispanic voteres, a task made much more difficult by the fact before he ran for president, newt gingrich said things like this. >> we should replace bilingual education with immersion in english so they learn the language of prosperity, not the language of living in a ghetto. ( booing ) ( laughter ) >> jon: you know, you're not at "who's line is it anyway?" ( laughter ) to be fair, newt gingrich didn't know when he said that, that he was going to need hispanic people to like him. ( laughter ) the problem is that now that gingrich is running for president he has to get helping voters on his side. >> the last time we spoke you said we were going to do the interview in spanish, but today
i think we'll stick to english. >> i can listen to some of your spanish if you go slow, but i'm too timid to respond. i speak pigeon spanish. >> jon: oh! that now thanks a sense. newt learned spanish from pigeons. no wonder he's saying it's the language of the ghetto. those birdses are filthy ( speaking spanish ) >> no, not ( speaking spanish. >> uh, no, i didn't follow you. ( laughter ) >> jon: i'm sorry. i didn't follow you. all my spanish is long-care related. if you have any questions about el hedgeos, or anything like that? of course, newt's outreach to hispanic voters has coinedded with the florida primary. you have to go for the gray hairs, the old stories, the wrinkle factories, the death adjacent. ( laughter ) and mitt romney is all over them
like while the on mitt romney. ( laughter ) ( applause ) he made an appearance yesterday at the villages, a retirement community that is so large, has so many old people, even floridians refer to the villages as "that place with all the old people." ( laughter ) try getting a handicapped park space at the villages. ( laughter ) so what approach did mitt take to pander to the oldies. bingo? mahjong, a promise to bring back "cagney and lacy." >> when i was a boy, my mom and dad put us in his car and took us around to the national parks. we came here and saw cypress gardens and the oceans, went west and saw the canyon-- canyones, actually, rivers and mountains and fell in love with the land in america. there was a-- there was a song that captures that for me. >> jon: it goes like this-- ( laughter )
"i like big butts you're the brother ♪ that's when a girl walks in with an itty-bitty waist ♪ ( laughter ) ( applause ) i've broken my cossic bone. tell me, tell me, mitt romney is not about to woo elderly voters with the power of song. >> you can sing that song? i love that song. do you know that song ♪ oh, beautiful for spacious skies for amber waves of grain ♪ . >> jon: okay, now, just for widows! okay! ( applause ) the diabetics! ( applause ) anybody on a jazzy. ( applause ) all right. you sang a verse of "america the
beautiful." very nice. now if we can move on. >> there's another verse. i won't make you sing it because you won't all know the words ( laughter ) >> jon: you know the relationship no one knows the words is that no one ever certificates their audiences to two verses of that song. ( laughter ) was he stalling for time so a pick pocket could work the crowd? wrap it up, man. >> wow, thank you. gentlemen, ladies and gentlemen, thank you. wow. impressive. and one more verse that's not as familiar to some. ( laughter ) ( applause ) >> jon: it was then that everyone in the crowd at the villages pressed their life alert button at the same time. and faked a stroke. ( laughter ) ( applause ) he's singing and i can't get out! but here's the worst part.
here's the worst part about all this pandering for both-- the speaking spanish, the singing. once you become president you have to keep doing it. exhibit a., while newt and mitt on the campaign trail, barack obama was conducting a virtual town hall on google plus-- yes, google plus. or as all gmail users know it, what the ( bleep ) is that thing up there? is there any way i can turn that off? actually, i give the president credit for doing a webcast. a risky move given the likelihood that one of those windows will pop up with a shirtingly joe biden. "hey, who's ready to party, huh, huh?" ( laughter ) during the chat, the president was in full-on campaign mode with a warm greeting for every questioner. >> i'm from fort worth texas and i have two beautiful girls. nice to meet you. >> you can't beat daughters. ( laughter ) ( applause ) >> jon: do you really have to remind people that they
can't-- that they can't beat daughters? that seems odd that you feel compelled-- i have two beautiful daughters. "well, you can't beat them. you just can't." the chat mostly boiled down to, "so, mr. president, help me." sometimes on a surprisingly microlevel. >> my husband has an engineering degree with over 10 years of experience, and he was laid off three years ago and has yet to find a permanent job in his field. >> if you send me your husband's resume, i'd be interested in finding out exactly what's happening right there. ( laughter ) >> jon: you're taking resumes? don't you have ( bleep ) to do. aren't there other things to your plate. mr. president, the russians are about to launchimisms. "did you know carl was proficient in xcel. >> it summed up what people
expect from their president, how much. it was what happened right after that. >> you just spoke of laws. i i was wondering if you could stand up and give us a little jig real quick. >> no dancing. >> jon: the president just offered to find your husband a job. ( laughter ) he said, "why don't you send me the resume." he's serving as the monster.com-in-chief. ( laughter ) and i believe your response should be, "that is ( bleep ) awesome, thank you." not, "oh, while we're here..." ( bleep ) ( laughter ) ( applause ) unbelievable. since you won't do it, i know a golden-voiced mormon who will. we
( cheers and applause ) >> jon: as you know, today is the florida primary, and willard mittard rom nard is supposed to have an excellent night in florida. his nearly assured victory there, confirmation of his pitch to voters. >> i spent my life in the private sector. i understand how the economy works. i worked at one company, bain, for 25 years. if we want to get jobs again in
this country, it's going to be helpful to have a person who's had a job in the private sector to crate jobs in the private sector. ( cheers and applause ). >> jon: it would also be helpful if that person was ruggedly handsome. ( laughter ) a jaw like cut marble. sideburns as white as the driven snow. ( laughter ) is very handsome. romney's big pitch is the time that he spent as the founding c.e.o. of bain capital, which even though bain capital sounds like it's been named after a batman villain and sounds look a company whose logo is a giant fist squeezing the global, we are assured bain capital is in no way evil. >> bain, for the most part, they have a lot of different businesses, but their primary business is private equity. >> bain capital, for example, looks for companies that are vulnerable but still have a decent business model, and they say, "we can make it better." >> jon: gee whiz, these
guys sound great. they come in and fix up up what's wrong, like what the "year eyed guys" did for say the strait guys. or what jimmy smitss does for tv shows. it's like when wayne bought wesley jesson vision care for six million bucks. they were in the specialty contact lens businesses. wesley jesson specialty contact lenses for when you absolutely, positively, want to freak out your friends. ( laughter ) so bain refocused on the core business, cut ad spending, and two years later took wesley jesson public and brought themselves in a cool $300 million profit. cha-ching, ( bleep ). or there's dade international
air, half century old medical supply company bain bought in 1994. they again refocused the business by closing down its facilities in puerto rico and miami, cutting 850 jobs, freezing pensions at a third plant, and slashing dade's research and development budget, all of which earned bain a cool $342 million as a reward for steering dade international into bankruptcy. wait a minute. wait. they get the money anyway? they get-- bain gets the $342 million even if they put the company in-- you know what would have helped dade not go bankrupt? $342 million. ( laughter ) ( applause ) you know what? no, that's not right. i guess it's fair. bain risked their own money to buy the company. so that risk should be rewarded. >> bain capital would eventually move on to more lucrative and risky investment strategies called leveraged buyouts.
you buy a company with borrowed money, then use the company's assets as collateral. >> jon: wow. that is a brilliant strategy. leveraged buyout. it's like putting 10% down on a car, then using the value of that car to get another loan and repay yourself that 10% and maybe a little 20% on top for your troubles, and then walking away, leaving the car on the hook for the payment. ( laughter ) but for bain capital to borrow money from other people knowing that those debts might never be repaid while still profiting themselves? i don't know. i don't know how i feel about that business practice. does it make anyone else uneasy? >> i think it's simply immoral for us as a nation and as a generation to keep spending more and more money by borrowing money from other people, knowing that those debt will never be
repaid during our lifetimes. >> jon: i don't know who that ruggedly handsome guy is, but i agree 100%. so there you go. mitt romney's pitch to americans appears to be elect me as your president. i have 25 years of business experience doing something i believe this country should never, ever do. ( laughter ) ( applause ) we'll be right back. ♪ swing music plays ♪
( cheers and applause ) >> jon: welcome back. my guest tonight, a professor of corporate law, corporate finance and securities at yale law school. please welcome to the program jonathan macey. ( cheers and applause ) we met backstage. nice to see you. >> nice to see you. >> jon: here's why i'm so happy you're here. you are a professor at yale, which was my chosen-- i was going to go but they have standards at yale, apparently. but you wrote an op-ed for the "wall street journal" that had i thought i need someone to help me, i get angry about the economy and about the feeling that i get that the financial
sector, while making honest money, once they accrue money and power, generally rig the game so that they can continue a sort of incumbency of wealth. and that makes me-- i think you have a slightly different viewpoint on it. and you can perhaps help me not tear my hair out. >> well, companies like bain or financial companies generally do one of two things. they invest their own money, which nobody has a problem with; or they invest other people's money. >> jon: right. >> to get the other people's money collected, they have to make returns for them. they have to make profits. so it's not as though these notions that, you know, private equity companies in general or bain in particular are out there ripping people off and just taking management fees because while maybe some of these investors report the brightest knives in the drawer, they're not complete idiots over a very
long period of time. >> jon: well, i mean, even-- ( laughter ) the guy who handles yale's endowment-- >> david swenson. >> jon: david swenson. he wrote that people, unless they are very well versed in, you know, the day-to-day and sophistication of all these things, should stay away from private equity. >> uh-huh. >> jon: do you think that's a reasonable piece of advice to give? i mean, if that guy who i would think is pretty well versed-- if he's in control of it-- if he wrote something like that, should normal people stay away from private equity? >> yes, but that's not necessarily bad. let me explain why. there are a lot of private equity firms. >> jon: right. >> the really good ones who make huge amounts of money, people like me can't put money in because we don't have enough to make them interested in taking the money, so the only ones, like the w.c. fields things, are
the ones who aren't going to do so well for us. >> jon: i think you just made my point for me. >> oh, dear. ( laughter ) ( applause ) >> jon: you couldn't have said that better if you were a cartoon character. that was one of those things-- "oh, dear." for instance, let's talk about private equity and bain capital. so the carried interest. >> right. >> jon: basically they take a company. they get 2% fee. >> right. >> jon: as long as they have the company. they usually have it for five years. >> right. >> jon: whatever that money is, and the profit they get off of that, 20%, comes to them, and they're only charged 15% in taxes. >> right. >> jon: how is that legal? >> well, two things. nob one, it's-- you're 98.5% right. there's a very important 1.5%. yeah, they get this 20%, but they only get the 20%, jon, if they are able to generate-- usually the contract says 8.5%
compound on the entire portfolio. >> jon: how did they get $242 million that they pulled out of dade, and then it went bankrupt? they took out another loan on it. they used that loan to pay themselveses that money. and then that money is taxed at 15% instead of 35%. >> right. right. ( laughter ) we're talking about different things. i'm talking about when they get to get the 20%, which is only after they return 8.5%. >> jon: what is the $242 million they took out from the loan. was that management fees? >> what they often do-- not always-- but what happens in certain private equity deals, private equity firms come in and take companies over, and they will pay themselves dividends, or they will take the assets and pledge them as collateral and borrow money. but they can't do this if the company's-- you know, we do have
a few laws that are sensible. ( laughter ) one of them is you can't-- you can't pay yourself a dividend if you know that the company that's paying the dividend is insolvent. >> jon: bankrupt the company. >> that's clearly illegal. ( laughter ) ( applause ) >> jon: but it bankrupted the company. two years later. >> but two years later, i'm sure it came as a huge surprise and disappointment. ( laughter ) >> jon: you can't even say this with a straight face! ( applause ). >> well, if someone could show that the board of directors of that company knew that the company was bankrupt or was going to become bankrupt as a result of the dividend payment, they'd be importantly liable -- >> stephen: who heads up the board of directors? the company that bought the dade heads up the board of directores, does it not? >> bain has its guys on that board. right. ( laughter ) and those guys get sued personally if they pay a
dividend when they knew the company was going to be bankrupt. but two years -- >> stephen: how often does that happen? >> how often do they get sued? a lot. a lot. >> jon: how often do they get the money back or do what they do-- pay a fine and don't admit any wrongdoing and the fine is always less than the amount of money they already made. >> can well, that definitely happens. >> jon: will you stay here? stay here. we're going to go to commercial. we'll throw it up on the web. jonathan macey. ( applause
( cheers and applause ). >> jon: that's our show. by the way, we got the whole interview with the professor up on the web. he was the counter-point to everything we've been talking about, and even he walked out like, "yeah i guess they're ( bleep )" i don't know what to do anymore. tomorrow night brad pitt will be here. ( cheers and applause ) but they won't be. ( laughter ) here it is. your moment of zen. >> matthew broderick reprizing his iconic 1986 role as ferris bueller. >> buehrle? buehrle? buehrle? >> captioning sponsored by comedy central